End with thermobiles: “the risk is that electricity prices in 2035 will be too high for households”

The completion of the sale of thermal cars will actually take place in 2035. The European Parliament’s project was approved by the European Council of Ministers last week. The ban on the sale of petrol and diesel cars will therefore become a reality in about ten years. But for Flavien Neuvy, economist and director of the Cetelem Observatory, there are still many unanswered questions.

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Capital: What is your view on the European Parliament’s decision to ban the sale of thermal vehicles in 2035?

Flavien Neuvy : The electric car is great for improving air quality and noise pollution in city centers. At this point, it is a formidable advantage. The question is whether it is the right choice to offer only the electric car. The diesel car in the depths of Creuse, I do not think it poses a major environmental problem. The most reasonable choice would certainly have been to offer a diversified mix.

In your opinion, is this decision too radical?

Once again, the electric car has its place in the big cities, but the all-electric raises many economic, industrial and environmental questions that remain unanswered. Have impact assessments been carried out? What will be the consequences for industrial employment? We are often told about the creation of jobs in the gig factory, but if in order to create a job it is necessary to remove two or three on the page, the balance is negative. We must not ask ourselves questions about the consequences of subsequent decisions.

Is resale of used cars becoming more complicated?

This is already the case today in some places. If you own an old diesel, reselling your vehicle is more complicated if you live in a larger urban area that has created a ZFE (low emission zone, editor’s note) than in a department where there is no traffic restriction. . We know that these used vehicles will no longer be able to circulate in large cities in the long run, or that their use will be more restrictive.

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Is it likely that this will adversely affect the resale value of these vehicles?

Depending on the place of residence, changes in the rules necessarily lead to changes in the value of vehicles. The less a vehicle is allowed to circulate, the harder it will be to resell, and therefore its value will decrease. But it is a difficult question to answer because there are many parameters that come into play and the rules are too unstable. Remember that 13 years ago, the government voted the first Grenelle de l’environnement, which called for the purchase of a diesel car with the ecological bonus. Today, diesel is being criticized. In a very short time we go from everything to everything.

So predicting what will happen in the next 12 to 13 years seems impossible. And if we look at the situation today, the price of used vehicles even tends to rise due to lack of components which are causing problems with the availability of new cars.

Will this switch to all-electric lead to the closure of gas stations in the short term?

It is certain that their number may be reduced as petrol and diesel cars disappear from circulation. But I do not think it will be just for the time being. There are still 35 million thermal vehicles in circulation on our roads. The rolling stock will still exist for a very long time, even after the 2035 deadline.

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Will this decision of the European Parliament not speed up the introduction of a tax on electricity?

This is a question that only the state has answered. But there are inevitably issues of tax revenue related to fuels. This is a very important economic manna for the state and for the regions. Today, no one is talking about it, because we must not scare those who want to go to electricity. But I do not see the state depriving itself of tens of billions of euros in tax revenue every year. The current tax must be replaced by something else.

The biggest Achilles heel of electric cars today is their overprice. Do you believe in a price drop soon?

You need to understand that the automotive industry is a volume industry. The more a manufacturer sells a car, the more it amortizes production costs, and the more it can lower the selling price. This is how it has always worked, and we thought it would be the same with the electric ones. The problem is that this bet is not won in advance because there is real uncertainty about the price of commodities. Today we see that they have risen a lot, which has helped drive up the sales price of electric cars, regardless of model.

The risk is that in 2035 we will have electric cars priced too high for most households. One should pay attention to the affordability of these cars. Producing models that no one can buy does not make sense. We can already see it today: without state aid (organic bonus of 6,000 euros, editor’s note) there would be no sale of electric cars.

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Will the cessation of thermal power weaken European producers in the face of Chinese competition?

The design of heat engines is mastered by European and American brands. Not by the Chinese, for whom this remained a technological barrier, especially to comply with anti-pollution standards. But this barrier to entry falls after the European Parliament’s resolution. Therefore, Europe will be a primary target for Asians who specialize in electric cars. When you buy an electric model today, there is a transfer of added value to China.

Europe will be a primary target for Asians who are electric car specialists

The challenge for European brands will be to produce batteries at competitive prices compared to the Asian market. It has not been won because the Chinese are 20 years ahead in this area.

Do you think people are still wary of Chinese brands?

No, I do not think there is any reluctance. People tell themselves that if cars are sold in Europe, it is because they comply with standards and regulations, especially when it comes to crash tests. Customers will increasingly ask themselves the question of when there will only be electric cars, and Chinese models will be attractive and 10-15% cheaper. We are not there yet, but it will happen very soon.

Many French people are reluctant to go for electricity due to the lack of charging stations. Do you think the problem will be solved in the coming years?

The roll-out of the infrastructure is not going very fast, but we will eventually get there. In 2035, I believe that we must have a coherent charging network. The real issue is power consumption. We are told today that we will have to embark on an excessive reduction in energy consumption because we do not have the necessary production capacity. Will we have the production capacity to power millions of electric cars in the future? There’s a real question mark there.

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